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The commissioner of the state's department of human services defended Gov. Tim Pawlenty's budget plan to eliminate cash assistance for the state's poorest residents, saying that the poor need to rely on "ingenuity" to survive.

"I don't doubt that it's going to take some ingenuity on the part of both counties and the recipients themselves to be able to find more alternatives or solutions," said Commissioner Cal Ludeman.

The General Assistance program provides up to $203 in monthly payments for single adults who can't work because of a disability. The program served about 19,000 people each month in the last fiscal year, and is the only source of income for many homeless adults.

The governor's proposed budget would replace the program with short-term grants for people in crisis situations. Low-income adults could access the program only once per year.

Advocates say the changes will force many homeless, mentally ill adults to engage in desperate and illegal behavior in order to survive.

"This proposal will create a whole new caste system of beggars in Minnesota," said Monica Nilsson, director of street outreach for St. Stephen's Human Services in Minneapolis.

Ludeman said the cuts are necessary to fix the state's $1.2 billion deficit. The cuts will save $13.76 million in the 2011 fiscal year.

"I'm not overselling this as a great plan," he said.

Ludeman said that the state has never conducted a formal audit of the General Assistance program, and doesn't know how recipients spend the money.

"We have no idea of knowing how much of those current dollars are being used for housing, for example," he said.

Ludeman said the program could also impact the state's public housing programs. General Assistance recipients living in public housing currently pay about 30 percent of their income for rent. If the program goes away, those payments would drop to zero, resulting in a loss of money for the state's public housing authorities.

"There could be some effect on the public housing reimbursements," Ludeman said. "Certainly, if someone is at a truly zero income level, that would be true."

About 4,400 General Assistance recipients live in licensed residential facilities, including domestic violence shelters, and receive just $89 a month. The governor's budget would not cut funding to those recipients.

Former recipients of General Assistance could still access food support benefits, but many homeless people say the cash grants are more important.

Bill Casarez uses the program to pay for his bus fare, phone, and basic hygiene items. He spends most of his nights at a shelter in Minneapolis.

"I can eat at shelters or go to a food shelf," Casarez said. "But if you take away the cash, what are people going to do?"

Under the governor's budget, General Assistance would end Dec. 1.

The Senate's Health and Human Services Budget Division will hear public testimony on the impact of the budget recommendations next week.